It’s all about the spread between portfolio returns and inflation.

If portfolio returns are less than spending plus annual inflation then the portfolio will decline. There should be no argument on this point. It’s just math.

Will it decline fast enough to be exhausted (or to force you into poverty-level spending habits and insomnia late in life)? Depends on your specific assets and number of years in retirement. There is a relationship between length of retirement and portfolio survival odds.

There’s also the issue of how a portfolio containing bonds can possibly keep up if inflation exceeds the coupon rate on the bonds. E.g. if 40% of your assets are 20y treasuries yielding 1.3% and inflation surprises everyone and reverts to its mean of 3% for the next 10 years, your WR in year 10 is 5.3% of your original portfolio value and yet you have a bunch of these bonds yielding 1.3%. Plus they’ve deprecated massively due to presumably higher interest rates.

If you think stocks would save the portfolio in such a scenario, consider how stocks have historically done when interest rates rise.

Some might say this scenario is unlikely because inflation has been falling for so long despite all the QE and monetary expansion. But if the odds of returning to normal inflation are 10% that would be the baseline failure rate of a 60/40 portfolio, *before* we factor in the risks of poor stock returns. If we say “don’t fight the Fed” on falling interest rates and QE, why question their competency when they say they will engineer inflation to overshoot 2%?